It's nice to see this. It's amazing that the Fed doesn't already have some sort of explicit target (inflation, price level, NGDP, whatever.) How can we know whether it is effective or not if we don't even know what it's goal is? If the Fed wants to create expectations of price stability, why not tell us what that means so that can know what we should be expecting? This could be one of those cases where being more mysterious gives one more prestige. But I think a predictable Fed is better than a prestigious Fed.
Our country desperately needs more intelligence in the debate over monetary policy. Once in a while, it's good to step back from the newspapers and talk shows and think deeply about these issues.
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